Brazil M&A: Valuations Up, Fees Fall

Jan 1, 2011

Brazil is on a path for record-breaking M&A volume and sky high valuations this year, but advisory fees are lagging.

by Taina Rosa

Brazilian M&A is expected to shatter the volume record set in 2007. Valuations in some of the frothier sectors are close to double where they were just a few years ago, but advisors are not seeing the benefit.

Still, advisors say they are having no trouble filling their pipelines. And while valuations have risen significantly, the factors pushing them up show no sign of abating in the next several years.

New market participants such as global private equity firms and national champions, alongside cheap access to capital, will continue to fuel M&A in the coming years, according to market observers.

"M&A will be more active in 2011. The number of transactions will increase and as the Brazilian economy continues to perform we will see more companies using M&A as a strategy for growth," Marco Gonçalves, head of M&A at São Paulo-based BTG Pactual, tells LatinFinance....

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